Global commerce is ugly, nasty business. It's basically lawless frontier. Only fools and the unscrupulous dare tread there. You can bet that in any given deal, human trafficking is going to be involved at some point, everybody involved does their best to look the other way or justify it. Systems of justice are easily perverted to suit personal schemes. Slavery may not exist anymore in the sense of humans being bought and sold on the open market, but instruments of sovereignty are regularly bought and sold on semi-open markets.
Trade deals like TPP are attempts by the governments of the world to regularize this world and bring it to heel, like a sheriff to a frontier town. They can be politically controversial, because you can't build a system of international law without infringing on the ability of people to pass their own laws. But it's either trade deals or the Wild West. Goods and capital are going to move around the world no matter what, all we can do is try to regulate it the best we can.
I disagree. Actually, I kind-of like what the US is doing - it's creating laws that have international reach (e.g. you can't launder drug money, and you can't bribe foreign officials), and then they apply it to (i) domestic companies doing business abroad, and (ii) foreign companies wanting to do business in the US.
So, each country could very easily create, and enforce, its own set of laws that would prohibit all of the crimes you mention. Companies would do business where they could, and if two countries would have incompatible laws (e.g. in country A, women can't work; companies from country B need to have 50% women employees in every region), there would be no trade between them. Unless they synchronize laws or create exceptions, of course.
In the end, you'd arrive to something similar to what we have today (global trade), except that it would be created democratically, bottom-up, as opposed to what we have now, which is top-down and inherently undemocratic.
You better hope the laws (and those who make them) in the strongest economic coalition agree with your moral judgement.
The idea that one culture can decide the laws of another or else the weaker capitulates its economic will is a very tricky concept. It works when the one doing the deciding is 'right'. It's tough to have 'wrong' laws be imposed on you by a foreign power. The idea your proposing is very clearly economic cultural imperialism. Just as in moral philosophy it's very difficult to extract just and good laws from their cultural context.
'Doing business' in another country, as the US currently interprets it, includes the entire supply chain. If you make widget X, that's used in Y, that's used in Z, that's used in a gadget in a car sold in the US, you are 'doing business' in the US and are liable to spend time in US federal prison if the cultural business practices of your nation are not compatible with current US law, even if you have never set foot in the US nor sold any product to US customers. That's scary.
One country's 'anti-competitive behavior' is another's 'human sociability'. Or one country's 'artistic right to profit' is another's 'crime against society'. Could not those acts which could be justified as being a 'fiduciary duty to profit above all else' be otherwise seen as 'immoral business practices' in a different cultural context? Is tracking foreign users a violation of legal privacy? Which of the above behaviors would land you in federal prison in your country? And which would get you charged and extradited to another country's federal prison?
What you're describing now is essentially ISDS, not what I'm proposing.
First, the only way the US (or any other country) can "imprison" foreign individuals is if other countries agree to enforce its laws - something I don't support, but accept that it will inevitably happen because of military or economic alliances - and is in any case completely democratic. The US can directly only enforce its laws against companies that do business in the US - and the worse possible penalties are either confiscation of the company's assets, or prohibition of doing business in the country - so companies can individually decide whether to abide by US laws and do business in the US, or neither.
Second, "economic imperialism" is exactly what ISDS/trade agreements are - a countries' laws can be overruled by arbitrary international courts that have no relationship with the people of said countries. Instead, I'm proposing that countries would freely choose whether to collaborate with other countries or not, and there are many different choices - e.g. UK could choose not to do business with SA, because they discriminate against women, or they could choose to do business with SA, because they have common military goals, or they could say "we don't care" because they decide that they support international trade despite different value systems.
Interesting. It's unclear to me if it's even possible outside of very rare circumstances that a country would want to cease trade with another country because their laws didn't align well. What would the incentive be to stop illicit or otherwise mutually beneficial trade when one party was conducting part of their trade unfairly?
It does seem that the previously mentioned economic imperialism is what the ISDS/trade agreements are, but it's not entirely clear how a more voluntary system would, in the end, be much different.
Maybe that kind of homogenization is inevitable if you have well-ruled trade between sovereign entities.
> So, each country could very easily create, and enforce, its own set of laws that would prohibit all of the crimes you mention.
The problem here is enforcement. It's one thing to pass a law. But you have to devote state resources to every law to make sure people aren't evading it. Competent, incorruptible public servants are rare and even if they weren't, you'd have to pay all of them. Resource-poor states just can't do it.
In practice all small countries can really do is accept foreign aid wherever you can get it. When you're dealing with bad actors with legal budgets bigger than your entire annual tax revenue, enforcement is hard.
In ISDS cases where foreigners seek relief from the US government, corporations with giant budgets aren't facing off against other countries. Instead, the US itself appoints an arbitrator (since the US isn't taken to ISDS panels all that often, you can quickly get a sense of the kinds of arbitrators they pick from the UNCTAD site: spoiler: they're international trade lawyers).
In ISDS cases where US investors seek relief from foreign countries, the US is only slightly better than 50/50 in winning cases. Most US->foreign cases are done under NAFTA and most of those pertain to Canada. If you narrow the 138 US->foreign cases tracked by UNCTAD down to those against countries whose annual tax revenue is lower than the largest US corporation, you'll find 20 cases, most of which pertain to Venezuela and Kazakhstan.
To me, this cuts against the argument that ISDS is just another vector with which the rich can buy justice for themselves.
> ISDS is just another vector with which the rich can buy justice for themselves.
I don't think it's that simple either. It was probably started with the best of intentions and is staffed by well-meaning, competent administrators. The problem is that it's not enough.
In the same way normal US police departments can become vulnerable to subversion through tactics like swatting, the ISDS is vulnerable to concerted attempts to subvert the system for personal gain. And there is every reason for them to want to do so.
> the US is only slightly better than 50/50 in winning cases
That doesn't account for (1) the asymmetry of the lawsuits - if the company loses, no big deal, but if a country loses, it has to pay up or change its laws, and (2) according to several articles I've read, many countries are afraid of ISDS lawsuits and the high penalties they might result in, so they will modify their laws just off the threat of an ISDS lawsuit.
I follow Tyler Cowen's Marginal Revolution and Matt Levine's Money Stuff. Popehat is another excellent resource. Quora has excellent contributors that are good at synthesizing and distilling deep lessons for easy consumption. Finally Stratfor is the best resource for geopolitics.
It takes awhile to piece everything together to get a full picture of how the world works, but in my opinion it's worth it. Then you can read articles like this:
And gain insights on how global patronage networks tend to work.
You can't just take a course or something on international trade and expect to be able to understand it. It's too complicated, even the top dogs only themselves know pieces of everything, they hire lawyers and accountants to actually understand the details.
> “It works,” said Charles Brower, a longtime ISDS arbitrator. “Like any system of law, there will be disappointments; you’re dealing with human systems. But this system fundamentally produces as good justice as the federal courts of the United States.”
Is that supposed to be a ringing endorsement? A lot of people regard the US justice system as "the best justice money can buy", with victory going to whoever can afford to put up the biggest fight.
I find it distasteful, but unfortunately unsurprising, that the financial royalty can force these one-sided trade agreements in 'democracies'. Perhaps western democracies are not as democratic as people think.
It's not so much that "democracies are not as democratic as people think" — but that they're more democratic than non-democracies.
Classic example might be Ancient Greece, were the percentage of the population that actually participated in the government was 10%. Given most political topics of major concern are usually closely divided, this means that it would not have been uncommon for 6% of the population to actually decide the fate of a given issue. Of that 6%, it's like a singular person (or small group of people) actually was the key to the outcome of the vote.
Is this thread experiencing a downvote/flag brigade?
Many of the comments are downvoted (without good reason), and the thread itself is at the bottom of the first page, despite being much "better" (70 points, 21 comments in 2 hours) than some of the top threads (granted, I can't see the flags)!
I wouldn't be shocked if people were flagging it for the headline being sensationalized/clickbait (as "letting executive escape their crimes" is just one aspect of a much bigger story). Or just flagging it because it's BuzzFeed.
The question is about comments/replies being downvoted, something I too noticed. Those downvoting could at least leave a comment as to why - when as in these cases it isn't obvious at all and looks like trolling.
I flagged this post right away, since it's a political advocacy piece that --- as you can see --- generated a mostly uninformed and unidirectional thread. Generally we're better off not litigating downvotes.
The other side of the argument, submitted without endorsement, and, for simplicity's sake in writing a comment that is slightly researched but still just an HN comment, with an unapologetic focus on the US:
* ISDS isn't a "secret court", but rather an instrument used in treaties, the way a venue or severability clause is used in normal civil contracts. Different investment treaties have different ISDS clauses with different rules. ISDS clauses are a big part of what make investment treaties "investment treaties": they're the enforcement part of the agreement.
* ISDS clauses don't preempt or even involve criminal law. In what appear to be literally all cases, they're handled by arbitrators with no formal judicial powers. Those arbitration panels are empowered exclusively to award damages, payable by the host state, to investors. If you look at who the arbitrators are in ISDS cases, they're random industry and academic people. None of them have any ability to "wipe sentences away".
* The US is undefeated in ISDS claims by foreign investors (only foreign investors have recourse to ISDS; a US investor cannot use the ISDS against the US). No person anywhere has ever won an award of money from the US through ISDS. Obviously, nobody has escaped a US criminal sentence through ISDS, because ISDS can't be used to do that, but even if it could, nobody has, because nobody has won an ISDS claim against the US.
* The reason that nobody wins ISDS claims against the US is that ISDS --- as the argument goes --- is primarily designed to bake into treaty language the norms of US and Western European civil law, particularly with regards to private property and contract enforceability. US investors have a slightly better than 50/50 average in winning ISDS cases, and make up about 20% of all such cases, which is proportional to the amount of foreign investing we do.
* Cases decided under ISDS, at least those with US jurisdiction, are appealable to US courts. You'll find some of those when you go look for ISDS cases.
(End argument that I am repeating without endorsing, begin poorly-informed commentary).
The most important ISDS clause pertaining to the US and the one under which every case against the US has been made is NAFTA. You can read the NAFTA ISDS clause here; it's pretty straightforward:
Skip forward to "Article 1122: Consent to Arbitration" and read downward. The investor gets to appoint an arbitrator, the state gets to appoint its own, and then both parties agree on a third presiding arbitrator. If the two parties can't agree on a presiding arbitrator, the secretary-general of (I think?) the OECD picks them.
At least with respect to NAFTA, there appears to be legal precedent that ISDS cannot be used to challenge environmental protection laws: that taxes, zoning, and regulation pertaining to environmental controls cannot be challenged as unfair takings from investors. I have no idea how forceful that precedent is.
I spent 30 minutes clicking around the UN's UNCTAD ISDS tracker site, which will make this shadowy world court controlling everything in the world with its shadowy clutches seem real, real boring toute suite:
* The case would presumably have to be decided in favor of the investor (there aren't many of those)
* You'd think the case would make mention of criminal law somewhere in the decision (there's only one of those, and it pertains to a fine, not a custodial sentence)
* Some principal of that case would somehow be associated with Donald Trump (no principal of any case I can find associated with Egypt has principals who show up in Google searches along with Trump).
Not that Trump matters here; his is a name clearly added by Buzzfeed to juice up the story.
I don't know whether ISDS is a bad thing, or is instead one of those sort of common-sense things that happen to be deployed in the middle of (often legitimate) controversies; like, most large-scale foreign fraud or environmental damage cases are going to involve some nominal form of "investment", so the investment dispute processes of our treaties are always going to be at play, and so on.
What I do feel comfortable saying is that Buzzfeed --- which has often acquitted itself pretty well in reporting controversies over the last few years --- is hyping this issue up way past the point where people are getting an accurate picture from their reporting.
Is it possible that the article is describing private settlements made in lieu of an official punishment, or would those have also showed up in your search (due to e.g. some kind of transparency requirement)?
I assume that's exactly what it must be, because, of course, ISDS tribunals are just collections of lawyers and have no authority to vacate sentences. But the UNCTAD site tracks cases that are pending and cases that are discontinued along with the cases in which investors win, and I can't find any with a fact pattern backing up Buzzfeed's precis.
I don't think Buzzfeed just made it up! But the way they've written it up, they are making an extraordinary claim, so the message board nerd in me wants to see, you know, some evidence?
The European Union tries to accomplish the same thing with a parliamentary legislature and intergovernmental council, backed up by a relatively transparent permanent court system and a framework of laws based on human rights. But then it gets accused of lacking transparency and accountability and the U.K. decides to leave and replace it with a bunch of bilateral agreements which will likely be subject to ISDS arbitration.
Edit: parent's post, now deleted, contained something like "What's the alternative, if we want global trade?" (IIRC).
Trade agreements without ISDS, obviously.
I mean, I recognise why investors might be reluctant to invest in Zimbabve or Vietnam without some guarantees of a "fair" legal process. But I cannot wrap my mind around why mature Western democracies like USA, New Zealand or Italy would ever sign an ISDS - their courts are transparent, not corrupt and fair (for the local understanding of fairness), so investors don't need to fear any risks (well, apart from the risk of doing business in general, that is).
Something completely new maybe? It's not like we have a horde of market ideologists pretending to do science on universities. Why not have them come up with something?
That invention is a very good mechanism - and it was/is for "money risk", not for crimes. I can't fathom how you can equate business venture failure with crime.
http://www.economist.com/news/finance-and-economics/21623756...
Which points countries that don't sign treaties with ISDS.
Anyone can also gather more information in http://investmentpolicyhub.unctad.org/ISDS